Wylie v. Denton

• Citation: 746 S.E.2d 689,323 Ga.App. 161
• Decision Date: 16 July 2013
• Docket Number: Nos. A13A0132,A13A0133.,s. A13A0132
• Parties: WYLIE v. DENTON, et al. Suntrust Bank v. Denton, et al.
• Court: United States Court of Appeals (Georgia)

323 Ga.App. 161

746 S.E.2d 689

WYLIE

v.DENTON, et al.

Suntrust Bank

v.Denton, et al.

Nos. A13A0132, A13A0133.

Court of Appeals of Georgia.

July 16, 2013.

Neal L. Conner Jr., Waycross, for Appellant.

Brent J. Savage, Savannah, Kenneth E. Futch Jr., for Appellee.

BRANCH, Judge.

These related appeals arise out of the termination of Angie Denton, Lynette Kearney, Donna O'Berry, Krystal Sikes, and Terri Smith (collectively “plaintiffs”) from their employment with SunTrust Bank. After they were fired, the plaintiffs filed the current action against several defendants, including Samuel Wylie, their supervisor at SunTrust, and the bank. Both their original and amended complaints assert claims against Wylie and SunTrust for violations of the Georgia's Racketeer Influenced and Corrupt Organizations Act (RICO) ¹, conspiracy to violate the Georgia RICO statute, common law fraud, and defamation. SunTrust filed a motion to dismiss the complaint in its entirety or, in the alternative, for a more definite statement, asserting that the facts alleged in the original complaint were insufficient to support the plaintiffs' claims. The bank also filed a separate motion to dismiss under OCGA § 9–11–12(b)(6), on the grounds that the plaintiffs' RICO and common law fraud claims failed as a matter of law. Wylie filed a motion to dismiss the complaint in its entirety or, in the alternative, for a more definite statement. Additionally, he joined SunTrust's motion under OCGA § 9–11–12(b)(6) to dismiss the plaintiffs' RICO and fraud claims. The trial court entered a series of orders in which it granted Wylie's motion for a more definite statement,² denied Wylie's motion to dismiss the complaint for insufficient pleadings, denied the parties' joint motion to dismiss the RICO and fraud claims, and denied SunTrust's motion to dismiss the complaint or, in the alternative, for a more definite statement. The trial court certified its orders for immediate review, Wylie and SunTrust each filed an application for an interlocutory appeal, and we granted both applications. These appeals followed.

In Case No. A13A0132, Wylie appeals from the orders of the trial court denying his motion to dismiss the complaint in its entirety because of insufficient pleadings and denying the joint motion to dismiss plaintiffs' RICO and common law fraud claims. In Case No. A13A0133, SunTrust appeals from the orders of the trial court denying its motion to dismiss the complaint or, in the alternative, for a more definite statement, and the joint motion to dismiss the RICO and common law fraud claims asserted by the plaintiffs. For reasons explained below, we find that the plaintiffs cannot state a claim under the Georgia RICO statute or for common law fraud. We therefore reverse the orders of the trial court, entered in both Case No. A13A0132 and Case No. A13A0133, denying Wylie's and SunTrust's joint motion to dismiss those claims. Additionally, in Case No. A13A0132 we vacate the order of the trial court denying Wylie's motion to dismiss the plaintiffs' remaining claim, for defamation, and remand with direction. And in Case No. A13A0133 we vacate the order denying SunTrust's motion to dismiss or, in the alternative, for a more definite statement of plaintiffs' defamation claim and remand with direction.

The standard of review for a trial court's order on a motion to dismiss is de novo, and “we treat all well-pled material allegations by the nonmovant as true and all denials by the movant as false. Only if the pleadings and exhibits incorporated into the pleadings show a complete failure by the plaintiff to state a cause of action, is the defendant entitled to judgment as a matter of law.” (Citation, punctuation and footnote omitted.) Crosby v. Pittman, 305 Ga.App. 639, 700 S.E.2d 629 (2010).

According to the complaint, the plaintiffs were all employed as tellers at a SunTrust branch in Waycross during the relevant time period. They allege that some time in the mid to late 2000's, Sandy Ursery, an employee of SunTrust client Clayton Homes, Inc., began to embezzle money from the Clayton Homes account. Ursery allegedly accomplished this embezzlement by presenting checks made payable to fictitious Clayton Homes employees or former employees, who no longer worked for the company.³ SunTrust cashed the checks without requiring Ursery to present a valid form of identification for the people to whom the checks were made out.

According to the plaintiffs, when Ursery first began presenting checks made out to third parties and for whom she could present no valid form of identification, they refused to cash them. Ursery then contacted Wylie, who directed each of the plaintiffs “not to question Ursery when she presented checks, but instead to cash the checks for Ursery as presented without [requiring identification].” The plaintiffs contend that they periodically questioned Wylie about this practice, and “[h]e consistently and repeatedly told [them] to forget banking practices and laws as they understood them, and insisted that they continue to cash the checks” presented by Ursery without requiring proper identification. Additionally, when SunTrust began to impose a $5 fee for cashing the check of any person who did not maintain a SunTrust account, Wylie directed the plaintiffs to waive the fee for any Clayton Homes checks made payable to third parties and presented by Ursery.

Clayton Homes discovered Ursery's long-term embezzlement in November 2010 and at that time it contacted SunTrust regarding the money stolen by Ursery. SunTrust then conducted an internal investigation, during which it interviewed each of the plaintiffs. Following their interviews, each plaintiff was instructed “to comply with the bank's written policy [regarding the identification required to cash a check] going forward, and to talk to no one, including each other,” about the embezzlement.

SunTrust eventually reimbursed Clayton Homes the money Ursery embezzled from its account, after allegedly securing a confidentialityagreement with the company. According to the complaint, SunTrust then filed a report with bank regulators and/or the United States Department of Justice (“DOJ”) that failed to reveal that SunTrust management had ordered the plaintiffs to cash the checks presented by Ursery without requiring proper identification.

On April 20, 2011, approximately five months after Clayton Homes first reported Ursery's embezzlement, the plaintiffs' employment with SunTrust was terminated. The reason given for the plaintiffs' firing was their violations of “bank policy in the cashing of ... checks” on the Clayton Homes account. The plaintiffs, allege, however, that SunTrust actually fired them in an effort to cover up the role that it and Wylie played in Ursery's scheme to embezzle money from her employer. They also contend that to further its cover-up efforts, the bank confiscated all of the notes and other documents that plaintiffs had kept at the Waycross branch that reflected Wylie's and SunTrust's role in the embezzlement scheme. Following their termination, the plaintiffs filed the current lawsuit against Suntrust, Wylie, Clayton Homes, and Ursery.⁴

The Joint Motion to Dismiss

Wylie's and SunTrusts's separate appeals from the trial court's denial of their joint motion to dismiss the plaintiffs' RICO and common law fraud claims present identical claims of error; we therefore address these appeals together. In support of their appeals, Wylie and SunTrust argue that even if proved, the facts alleged in the complaint cannot support the RICO and fraud claims as a matter of law. We agree.

1. Under Georgia's RICO statute, it is “unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money.” OCGA § 16–14–4(a). A “racketeering activity,” also known as a “predicate act,” is the commission of, the attempt to commit, or the solicitation or coercing of another to commit, a “crime which is chargeable by indictment” under one of forty categories of offenses. OCGA § 16–14–3(9)(A)(i)–(xl). And a “pattern of racketeering activity” means that there have been at least two acts of racketeering activity that are interrelated ⁵ and that were done “in furtherance of one or more incidents, schemes, or transactions.” OCGA § 16–14–3(8)(A). Additionally, it is unlawful to conspire to violate the substantive provisions of Georgia's RICO Act. OCGA § 16–14–4(c). Under Georgia law, a person may be found liable for RICO conspiracy “if they knowingly and willfully join a conspiracy which itself contains a common plan or purpose to commit two or more predicate acts.” (Citation omitted.) Rosen v. Protective Life Ins. Co., 817 F.Supp.2d 1357, 1382(II)(G) (N.D.Ga.2011) (applying the Georgia RICO statute).

To assert a civil claim based upon either a violation of the RICO statute or a conspiracy to violate that statute, a plaintiff must show that the defendants violated or conspired to violate the RICO statute; that as a result of this conduct the plaintiff has suffered injury; and that the defendant's violation of or conspiracy to violate the RICO statute was the proximate cause of the injury. Cox v. Mayan Lagoon Estates, Ltd., 319 Ga.App. 101, 109(2)(b), 734 S.E.2d 883 (2012).

As best we can tell from their amended complaint, the plaintiffs are alleging the existence of two separate but related schemes. The first was a scheme to defraud (or conspiring to defraud) Clayton Homes; the second scheme was to cover up the first scheme, by misleading or defrauding (or conspiring to mislead or defraud) federal bank regulators and/or the DOJ. The predicate acts alleged in furtherance of the first scheme are forgery, theft, money laundering, financial institution fraud, and engaging in a monetary transaction with property derived from an...